Legislation Would Protect Domestic Jobs and America’s National Security by Restoring Requirement that Military Steel be 100 Percent Made in America

Thursday, February 9, 2012

Legislation Follows Letter Sent to the Defense Department Urging it to Reverse 2009 Decision that Ended 35-Year Rule Requiring that Steel Purchased by U.S. Military be Both Melted and Finished in the U.S.

WASHINGTON, D.C. – U.S. Sen. Sherrod Brown (D-OH), along with Sens. Chuck Schumer (D-NY), Kirsten Gillibrand (D-NY), Amy Klobuchar (D-MN), Robert P. Casey, Jr. (D-PA), and Al Franken (D-MN) today introduced legislation to ensure that armor plate for America’s military is truly “made in America.” The bill would restore a 35-year rule, overturned by the Department of Defense in 2009, requiring that steel purchased by the U.S. military be 100 percent “made in America”—that is, both melted and finished in the United States.

Steel armor plate is used for military vehicles, tanks, and equipment. Under Defense Department regulations, specialty metals procured for defense purposes—including steel armor plate—must be produced in the United States. Despite more than 35 years of legal interpretation and administrative practice requiring that specialty metals be melted in the United States, the Defense Department in 2009—in the midst of the wars in Iraq and Afghanistan and during a time when the demand for steel was high—published a final rule defining the word “produced,” as it applies to armor plate under the Special Metals Amendment, to include simple finishing processes. This means that armor plate melted in foreign countries, including Russia and China, could be imported and subjected to simple finishing processes in the United States and then deemed to have been "produced" domestically.

Countries like China provide illegal subsidies to their domestic industries, along with undervaluing currency so their exports have an unfair price advantage. The senators were successful in passing the Currency Exchange Oversight Reform Act in 2011, legislation that represents the biggest bipartisan jobs bill—at no cost to American taxpayers—to clear the Senate last year. The bill would treat currency manipulation as an unfair export subsidy, giving the U.S. new resources to provide immediate relief for American manufacturers being undercut by cheap Chinese imports.

The United States Steel and Security Act, being introduced today, would require steel armor plate to be both melted and finished in the United States, not only protecting American steel jobs, but our country’s national security. Cleveland’s ArcelorMittal manufactures steel armor plate, as does Nucor.

“Our military is top-notch—and the equipment they use should be, as well. We know how to make steel armor plate here in America, and there’s no reason why countries like China and Russia should be making our military’s vehicles and equipment,” Senator Brown said. “A loophole in Defense Department regulations allows foreign companies to melt steel, then ship it to the United States for simple finishing processes—which jeopardizes the American steel industry. Importing steel armor plate puts both our manufacturing jobs and our national security at risk, and that’s why steel armor plate should be both melted and finished in the United States.”

“Our military steel should be proudly stamped ‘Made in the U.S.A.’ each and every time,” said Senator Schumer. “Great manufacturers from every corner of our country are ready to answer the call of duty – let’s give them the chance to step up and produce the high quality steel that our military needs, which would boost jobs across the country and help companies from New York to California. American workers can meet the military’s need, so we should call on them instead of workers halfway around the world in China or other countries that don’t play by the rules and undercut U.S. jobs at every turn.”

“In these tough economic times, it is critical that the federal government does everything it can to encourage manufacturing in the U.S.,” said Senator Gillibrand, a member of the Armed Services Committee. “I want to see ‘Made in America’ again. This requirement would not only ensure that our men and women in uniform are protected with the best equipment, but it preserves manufacturing jobs right here in upstate New York.”

“Using American-made steel in our military allows us to protect our troops while supporting local economies,” Senator Klobuchar said. “This legislation will help promote ‘Made in America’ products while also ensuring that our troops have the first-rate equipment and vehicles they deserve.”

“Any time the Defense Department buys steel it should be stamped with ‘Made in America,’” Senator Casey said. “Ensuring the Defense Department returns to its policy of only buying U.S. made steel will create jobs and act as a catalyst for growth of Pennsylvania’s steel producers.”

“Iron ore from Minnesota's Iron Range helps produce the best steel in the world and we should be doing everything we can to ensure that the American military uses top-quality homegrown steel to protect our troops,” said Senator Franken. “Requiring steel plates to actually be made in the United States and not places like China will keep more of our defense dollars right here at home and create jobs in Minnesota and across the country at a time when our economy desperately needs a boost. It’s a win-win and that’s why I support this legislation.”

After numerous Congressional inquiries and report language questioning DoD’s interpretation of “produced,” the FY11 National Defense Authorization Act included a provision requiring a review and, if necessary, revision of the existing regulation to ensure the definition is consistent with Congressional intent (the review was required to be completed within 270 of enactment of the law, i.e., early October 2011). On July 25, 2011, DoD published its request for comment, and the deadline for public comment was September 8, 2011. As of early 2012, DOD has yet to finalize its review.

In September 2011, Brown—along with Sens. Richard Burr (R-NC), Robert P. Casey, Jr. (D-PA), Kay Hagan (D-NC), Daniel Coats (R-IN), Jay Rockefeller (D-WV), Al Franken (D-MN), and Amy Klobuchar (D-MN)—sent a letter to Defense Undersecretary Ashton Carter urging him to revise the Department’s requirements on steel plate. A copy of that letter can be seen here. During consideration of the National Defense Authorization Act in December 2011, Brown and Senate Armed Services Committee Chairman Carl Levin (D-MI) called for the DOD to expedite its review of this issue.